What If BlackBerry’s Patents Aren’t So Valuable After All?
BlackBerry’s patent portfolio is believed by some to be among the company’s most valuable assets. But what if it’s not? What if its worth to a potential BlackBerry suitor is undermined by preexisting cross-licensing agreements?
That may be prove to be the case, according to a new theory put forth by Pacific Crest analyst James Faucette. A recent analysis has put the value of BlackBerry’s patents at somewhere between $2 billion and $5 billion, depending on whether they’re bought by a lone acquirer or purchased by a consortium of companies in some sort of cross-licensing deal. But, as Faucette notes, it’s entirely possible that some of the value of BlackBerry’s patent portfolio has been eroded over the years by the licensing deals it has inked in the course of normal business.
“[BlackBerry] clearly has a large patent portfolio, but we suspect that much of that portfolio has already been cross-licensed to other wireless companies,” Faucette theorizes. “If that is indeed the case, most traditional wireless players may already have complete (or nearly complete) access to the company’s IP.”
That doesn’t mean that the cross-licensed IP in question isn’t valuable — it is. But its usefulness might be more limited to certain buyers looking to more aggressively monetize them. And that could undercut their dollar value.
Another issue that could do the same thing: The standards-essential patents in BlackBerry’s portfolio. According to an amicus brief filed by BlackBerry in Apple v. Motorola, the company owns and licenses a lot of standards-essential patents (SEPs).
BlackBerry has contributed significantly to technical standards in the United States, Europe, and elsewhere, and contributes proprietary technology to many standards development efforts. … Many of BlackBerry’s products implement numerous different standards created by dozens of standard-setting organizations (SSOs). As a result, BlackBerry has entered into numerous license and cross-license agreements involving SEPs.
In other words, BlackBerry has a decent amount of IP tied up in SEPs. And the problem with that — potentially — is that SEPs aren’t worth quite as much as patents that haven’t been contributed to an industry standard, because their owners are obligated to license them at fair and reasonable rates. Gaining sales injunctions or import exclusions for SEP infringement tends to be rare, Faucette observes.
Now, patent portfolios like BlackBerry’s are notoriously tough to appraise, and it’s impossible to say at this point just how pervasive the cross-licensing issues Faucette describes are, and how detrimental they might be to a potential patent sale. But maybe BlackBerry’s patents aren’t quite so valuable after all.